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Mosaic (MOS) to Report Q1 Earnings: What's in the Cards?
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Mosaic (MOS - Free Report) is set to release first-quarter 2017 results before the opening bell on May 2.
Mosaic reported earnings of 3 cents per share in fourth-quarter 2016, down from 44 cents per share recorded a year ago. Earnings, barring one-time items, were 26 cents per share that topped the Zacks Consensus Estimate of 12 cents.
Let's see how things are shaping up prior to this announcement.
Factors to Consider
Mosaic expects phosphates sales volumes in the band of 2 million to 2.3 million tons for first-quarter 2017 versus 2.2 million tons for the same quarter in 2016. Average selling price, FOB plant, is expected to be in the range of $315–$335 per ton. The segment gross margin rate is expected to be in the upper single digits.
Potash sales volumes have been forecast in the range of 2.15 million–2.3 million tons for the first quarter, compared with 1.5 million tons in the prior-year quarter. Average selling price, FOB plant, is expected in the band of $165 to $180 per ton and the gross margin rate is anticipated to be roughly 20%.
Total sales volumes for the International Distribution segment are expected to range between 1.2 million–1.5 million tons for the first quarter, compared to 1.3 million tons in the prior-year quarter. The segment gross margin is estimated to be around $20 per ton.
The company is a global leader in potash and remains committed to expand its annual potash production capacity. Mosaic is also gaining from its cost reduction measures, which is helping it to offset headwinds from depressed nutrient prices. The company remains on track with its $575 million cost-cutting program, leading to an improvement in its operating cost structure.
Mosaic also sees improving global demand for nutrients. The company sees a more stable operating environment in 2017 and anticipates higher demand for both phosphate and potash.
The buyout of CF Industries’ assets also expands Mosaic’s phosphate business and production capacity of the nutrient in Florida. The acquisition will bring Mosaic’s annual phosphates capacity to roughly 11.5 million tons. Moreover, the $2.5 billion buyout of Brazil-based Vale S.A.’s Vale Fertilizantes business is expected to help the company to capitalize on the rapidly growing Brazilian agricultural market and improving business conditions. It is projected to generate more than $80 million of post-tax synergies.
Mosaic has outperformed the Zacks categorized Fertilizers industry over the past six months. The company’s shares rallied around 16.7% over this period, compared with roughly 8.4% gain recorded by the industry.
However, Mosaic faces a challenging operating environment in the agriculture space. The company is also exposed to a difficult pricing environment which may continue to weigh on its margins.
Mosaic recently announced a production outage at its Esterhazy K2 potash mine in Saskatchewan. This incident is likely to reduce production by 200,000–300,000 tons. Although the production disruption is unlikely to impact first-quarter potash results, the company expects a negative impact on its second-quarter sales volumes.
Our proven model does not conclusively show that Mosaic is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here, as you will see below:
Zacks ESP: Earnings ESP for Mosaic is currently -10.53% This is because the Most Accurate estimate is at a loss of 17 cents while the Zacks Consensus Estimate is pegged at a loss of 19 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Although Mosaic’s Zacks Rank #3 increases the predictive power of ESP, its negative ESP makes surprise prediction difficult.
Note that Sell-rated stocks (#4 or 5) should never be considered going into an earnings announcement, especially when the company is witnessing negative estimate revisions.
Stocks to Consider
Here are some companies in the basic materials space that you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
Westlake Chemical Corporation (WLK - Free Report) has an Earnings ESP of +1.25% and carries a Zacks Rank #3.
Franco-Nevada Corporation (FNV - Free Report) has an Earnings ESP of +10% and flaunts a Zacks Rank #3.
Zacks' Hidden Trades
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors. Click here for Zacks' secret trade>>
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Mosaic (MOS) to Report Q1 Earnings: What's in the Cards?
Mosaic (MOS - Free Report) is set to release first-quarter 2017 results before the opening bell on May 2.
Mosaic reported earnings of 3 cents per share in fourth-quarter 2016, down from 44 cents per share recorded a year ago. Earnings, barring one-time items, were 26 cents per share that topped the Zacks Consensus Estimate of 12 cents.
Let's see how things are shaping up prior to this announcement.
Factors to Consider
Mosaic expects phosphates sales volumes in the band of 2 million to 2.3 million tons for first-quarter 2017 versus 2.2 million tons for the same quarter in 2016. Average selling price, FOB plant, is expected to be in the range of $315–$335 per ton. The segment gross margin rate is expected to be in the upper single digits.
Potash sales volumes have been forecast in the range of 2.15 million–2.3 million tons for the first quarter, compared with 1.5 million tons in the prior-year quarter. Average selling price, FOB plant, is expected in the band of $165 to $180 per ton and the gross margin rate is anticipated to be roughly 20%.
Total sales volumes for the International Distribution segment are expected to range between 1.2 million–1.5 million tons for the first quarter, compared to 1.3 million tons in the prior-year quarter. The segment gross margin is estimated to be around $20 per ton.
The company is a global leader in potash and remains committed to expand its annual potash production capacity. Mosaic is also gaining from its cost reduction measures, which is helping it to offset headwinds from depressed nutrient prices. The company remains on track with its $575 million cost-cutting program, leading to an improvement in its operating cost structure.
Mosaic also sees improving global demand for nutrients. The company sees a more stable operating environment in 2017 and anticipates higher demand for both phosphate and potash.
The buyout of CF Industries’ assets also expands Mosaic’s phosphate business and production capacity of the nutrient in Florida. The acquisition will bring Mosaic’s annual phosphates capacity to roughly 11.5 million tons. Moreover, the $2.5 billion buyout of Brazil-based Vale S.A.’s Vale Fertilizantes business is expected to help the company to capitalize on the rapidly growing Brazilian agricultural market and improving business conditions. It is projected to generate more than $80 million of post-tax synergies.
Mosaic has outperformed the Zacks categorized Fertilizers industry over the past six months. The company’s shares rallied around 16.7% over this period, compared with roughly 8.4% gain recorded by the industry.
However, Mosaic faces a challenging operating environment in the agriculture space. The company is also exposed to a difficult pricing environment which may continue to weigh on its margins.
Mosaic recently announced a production outage at its Esterhazy K2 potash mine in Saskatchewan. This incident is likely to reduce production by 200,000–300,000 tons. Although the production disruption is unlikely to impact first-quarter potash results, the company expects a negative impact on its second-quarter sales volumes.
Mosaic Company (The) Price and EPS Surprise
Mosaic Company (The) Price and EPS Surprise | Mosaic Company (The) Quote
Earnings Whispers
Our proven model does not conclusively show that Mosaic is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here, as you will see below:
Zacks ESP: Earnings ESP for Mosaic is currently -10.53% This is because the Most Accurate estimate is at a loss of 17 cents while the Zacks Consensus Estimate is pegged at a loss of 19 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Although Mosaic’s Zacks Rank #3 increases the predictive power of ESP, its negative ESP makes surprise prediction difficult.
Note that Sell-rated stocks (#4 or 5) should never be considered going into an earnings announcement, especially when the company is witnessing negative estimate revisions.
Stocks to Consider
Here are some companies in the basic materials space that you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
The Chemours Company (CC - Free Report) has an Earnings ESP of +4.1% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Westlake Chemical Corporation (WLK - Free Report) has an Earnings ESP of +1.25% and carries a Zacks Rank #3.
Franco-Nevada Corporation (FNV - Free Report) has an Earnings ESP of +10% and flaunts a Zacks Rank #3.
Zacks' Hidden Trades
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors. Click here for Zacks' secret trade>>